The Price of Financial Inclusion: A Case-Study of Innovations and Interest Rates of Micro-Loans in Senegal

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Abstract

This case study evaluates the online market created by Zidisha for micro-loans in Senegal since the foundation in 2009. To open, the paper gives specific insights into Senegalese culture that come into play with computer integration. The general backgrounds of micro-financing and the micro-lending market in Senegal are illustrated, and buyers and sellers are defined. Then, using information gained from the internship, market details of Zidisha Inc. are presented. Economic theories offer explanation of how the features of the micro-loan market created by Zidisha differ from the traditional characteristics of micro-financing in Senegal. The analysis section uses data gathered from the online records of Zidisha Inc. to form regression models of the micro-loan interest rates with respect to demographic and loan information of Zidisha borrowers in Senegal. The conclusion illustrates notable findings within the paper.